Inform Your Child About Credit Cards – Courtney Garrison
Has your child ever come up to you and proudly stated that when they are older they will obtain a credit card? My seven year old made that statement last week to me in the middle of us putting up groceries; my first reaction was to stare at him in shock. My second reaction was to wonder why he declared that. Then I started to think — I don’t use cash and only use my debit card. All he has ever seen is this shiny card that magically buys our groceries and things that we want. He does not realize that I budget prior to using my debit card and he does not realize that I watch my bank account like a hawk every week. All I show him is this mysterious plastic card that takes care of us.
Americans have $779 billion in national credit card debt. The majority believe it is okay and even normal to be in debt, to have a payment that they are then enslaved into managing every month on top of all their other bills. It is detrimental to our country to have this mindset and it needs to be re-wired.
Proverbs 22:7 — “The rich rule over the poor, and the borrower is slave to the lender.”
You might be wondering where to even start when having this conversation with your child(ren). The best place is to start as soon as they mention credit cards. If you’d rather be proactive then perhaps explain on the way to the store and explain that your debit card is money you already have. Take them to the bank and explain that your money goes to the bank which allows you to buy things on your debit card — I had to show my child on my card where it states “Debit” so he fully understood that there is a difference between a debit card and a credit card. It is also best to have everyone in your family on the same page and have a family meeting sit down conversation to explain credit cards.
“Never spend your money before you have earned it” — Thomas Jefferson
What to explain to your child:
- Credit cards are not your money — explain to your child that the money on those cards is not their money. They do not have control of that money; they do not own that money.
- Describe how credit cards work — how once you buy said item with a credit card that you have to pay it back, there is no ignoring a credit card debt until the payment is made — usually with interest and give them the simple math equation of: if the item costs $10, you have to pay back $12-$15. Does that seem fair? Does spending extra money on a flat rate item seem intelligent?
- Reiterate that it is not smart to borrow money from anyone. If you’re Christian, refer back to Proverbs 22:7, “The rich rule over the poor, and the borrower is slave to the lender”. If you’re not Christian, take that passage as a quote because it is common sense. Borrowers are slaves to the people they owe money to, example: if student loan debts are behind too much they will garnish wages or income taxes.
- Enlighten your child with the suggestion that if you don’t have the money for the product you want then you do not need to buy it right then — teach your child about saving up for things they truly want. This will also communicate with them about work ethics, show them what they value and what they’re willing to put an effort towards, and instill patience.
- Clarify that money does not grow on trees and that you have to work for it — most children think that money is just magically there, it is not a concrete theory to them. If you don’t already have an allowance set up for your child, think about setting one up. Visit next week and I will follow up with an allowance income for your child.
Our economy and country’s success depends on our youth and what we show them — teach your children while they are young to think with their brain and not with their feelings of instant gratification.
Questions for you:
What additional points would you bring up to your child regarding credit cards? Has your child brought up credit cards to you before? If yes, how did you handle their questions?
Courtney Garrison is owner, content creator and copywriter for hire at Honey Badger Writing. Her goal is to help women entrepreneurs save time by writing and planning their content which engages customers and converts. She is a Boy Mom of two, Secretary of her local Cub Scout Committee, and resigned from her former career in mental health to homeschool her oldest son. Courtney loves to take her boys on road trips; campouts; and write about education, parenting, mental health, finances, and the great outdoors.
You can follow her on Instagram @honey_badger_writing where she helps business owners with tips on hiring freelancers and writing copy!